CommonBond

CommonBond was a financial technology firm that operated as a marketplace lending platform for student loans. The company was founded in 2011 by David Klein, Michael Taormina, and Jessup Shean, who met as MBA students at the University of Pennsylvania's Wharton School. Their firsthand frustration with the complex and expensive process of obtaining student loans for their own graduate education served as the primary motivation for creating the business. Before co-founding CommonBond, CEO David Klein had experience in consumer finance at American Express and as a financial services consultant at McKinsey & Company. This background provided him with insights into consumer lending and strategic business development. The founders' concept was accepted into the Wharton Venture Initiation Program, a startup incubator that helped them develop their model.

The company's business model was centered on originating and refinancing undergraduate and graduate student loans at rates often lower than those offered by the U.S. government or traditional private banks. CommonBond's online-only platform enabled a streamlined, transparent application process, which kept operational costs low and allowed savings to be passed on to borrowers. The firm generated revenue by selling the loans it originated to institutional investors, such as asset management firms, at a premium. Initially targeting MBA students at Wharton, the company launched nationally in September 2013 after securing over $100 million in equity and debt financing. Its target clients were graduates with a history of financial responsibility who were seeking to reduce the financial burden of their education debt.

Over its ten-year span, CommonBond achieved significant milestones, funding over $5 billion in loans and serving more than one million users. The company expanded its services to include refinancing for Parent PLUS loans and loans for graduates of medical, law, and engineering programs. Strategic acquisitions were part of its growth strategy, including the purchase of Gradible in 2016 to offer employer-based student loan repayment solutions, and NextGenVest in 2018 to integrate AI-powered financial advice for a younger demographic. However, the company faced insurmountable challenges when the COVID-19 pandemic led to a federal pause on student loan payments, which significantly reduced demand for its core refinancing product. An attempt to pivot into financing for residential solar panel installations failed to gain the necessary capital to become profitable. Consequently, CommonBond wound down its operations in September 2022.

Keywords: student loan refinancing, marketplace lending, fintech, graduate loans, private student loans, education finance, David Klein, Wharton startup, debt consolidation, online lending platform, Parent PLUS loans, financial technology, student debt, loan origination, venture capital, financial services, CommonBond closure, lending disruption, education funding, social impact lending